Over a dozen bills that would amend the Internal Revenue Code of 1986 to expand health savings accounts (HSAs) have been introduced in Congress this year, according to the International Foundation’s U.S. Legislative Tracker (members only). If enacted, the bills aim to change the disadvantages of HSAs and/or high-deductible health plans (HDHPs) that make them inaccessible or undesirable to some people. If enacted, some bills would allow more people to own HSAs, contribute more annually, and use HSA dollars for more items and services. Other bills would change HDHPs to allow more than preventive services, such as chronic disease treatments, to be covered before the deductible.

HSA Advantages

Under current law, HSAs have multiple tax advantages. Contributions are pretax and reduce taxable income. Distributions are not subject to tax as long as money is used for qualified medical expenses. Investment earnings are not taxable and people who invest long-term can use an HSA as a retirement savings tool. HSAs are 100% owned by the individual who can use the account for their lifetime and potentially leave it as an inheritance for a surviving spouse or beneficiary.

Employer Pulse Check

Employers support changes to make HSAs more flexible, according to Mercer’s 2025 Health Policy Survey of large employers (with 500 or more employees). The highest average rating was for allowing the use of HSA funds for long-term care. “After that, employers were most likely to strongly support allowing telemedicine and mental health services to be covered pre-deductible without interfering with HSA eligibility, and higher annual HSA contributions limits,” Mercer reported. In addition, just over half of employer respondents supported removing the HDHP enrollment requirement to be HSA eligible.

HSA Legislation Goals

Fixing perceived disadvantages of HSAs and/or HDHPs are the main legislative goals. Highlights of some of the bill proposals are as follows.

• Expand pre-deductible coverage for HDHPs to include telehealth, mental health care and chronic condition treatment services
• Expanding permissible uses of HSA funds to include funeral expenses, expenses during family medical leave and long-term care services
• Expanding what items and services are eligible medical expenses
• Allow people without HDHPs to have HSAs  
• Allow HSA account holders to have direct primary care subscriptions.
• Raise annual contribution limits and catchup limits
• Allow transfers from other health accounts to HSAs

Read on to see what bills are tied to these goals. The International Foundation will keep you informed about any progress in Congress.

Bill With the Most Momentum: Expanding Preventive Care for HDHPs

The Chronic Disease Flexible Coverage Act (HR 919), which has passed the House, would treat services and items for chronic conditions as meeting the preventive care deductible safe harbor, meaning the HDHP plan would cover these before the deductible is met. This bill would codify IRS Notice 2019-45, issued during the first Trump administration, which permits HDHPs to provide coverage for high-value chronic disease management services pre-deductible. For example, preventive care would cover certain testing, drugs and therapies for conditions like congestive heart failure, diabetes, osteoporosis, asthma and depression.

Related, on April 17, sponsors of the Chronic Disease Flexible Coverage Act sent a letter to the acting IRS commissioner urging IRS to update Notice 2019-45 with more chronic disease management services.

Telehealth for HDHPs

The Telehealth Expansion Act (HR 1650) (S 763) would permanently allow pre-deductible telehealth in HDHPs. This was temporarily allowed during the pandemic, but it expired last year.

Expanding Permissible Uses of HSA funds

• Funerals: HR 2436 would allow HSA distributions for funeral expenses.
• Dental items—The Oral Health Products Inclusion Act (HR 1219):
  • Would include over-the-counter oral health care products as qualified medical expenses.
• Physical activity—The Personal Health Investment Today (PHIT) Act (HR 2369) (S 1144):
  • Would include up to $1,000 per year ($2,000 for joint tax filers) for gym memberships, fitness programs and exercise/sports equipment (with some limits).
• Veterinary care—The People and Animals Well-being (PAW) Act (HR 1842):
  • Would allow veterinary expenses for pets and service animals to be treated as medical care.
• During caregiving—The Freedom for Families Act (HR 74):
  • Would allow HSA distributions during family or medical leave. An HDHP would not be required to establish and contribute to an HSA. The annual contribution limit would increase to $9,000 (or $18,000 for joint filers).

De-Coupling HDHP and HSA

• Patient Fairness Act (HR 2419):
  • Would allow all individuals to contribute to HSAs
  • Would increase contribution limits and catch-up limits.
• Personalized Care Act of 2025 (S 276) (HR 810)
  • Would expand HSA access to individuals with Medicare, Medicaid and health care sharing ministries
  • Would allow premium payments and fees paid for “medical care service arrangements.”
• Healthcare Freedom Act of 2025 (HR 317)
  • Would rename HSAs and make them available to all individuals.
  • Would raise annual contributions to $12,000 (or $24,000 for joint filers) and raise the catch-up limit by $5,000.
• HSA Modernization Act (HR 548)
  • Would allow veterans with disabilities and seniors over age 65 to contribute to HSAs
  • Would allow pre-deductible mental health services.

Expanding Services to Permit Direct Medical Care

• The Direct Medical Care Freedom Act of 2025 (HR 1140):
  • Would allow these fixed-period fee arrangements for people with HSAs. Direct care would include primary and/or specialty care.
• The Primary Care Enhancement Act of 2025 (HR 1026):
  • Would allow direct primary care service arrangements for people with HSAs. Primary care would focus on prevention and chronic disease management, but wouldn’t cover procedures that require general anesthesia, prescription drugs, and lab services.

Transferring Funds Between Accounts When Switching to HDHP

• The Flexible Savings Arrangements for a Healthy Robust America Act (HR 2667):
  • Would allow distributions from a health flexible spending arrangement (FSA) or health reimbursement arrangement (HRA) directly to an HSA when establishing coverage under a HDHP.

What We’re Watching

HSAs and HDHPs were designed in part to boost individual health care consumerism and preventive care services. Those issues are at the forefront now more than ever with executive orders that direct federal agencies or task forces to emphasize chronic disease prevention and disclosure of health care prices so that people can make choices about items and services. Later in 2025, Congress will debate regarding tax provisions that expire this year, and HSAs could be part of the discussion. The International Foundation informs members of major legislative updates in Today’s Headlines (delivered straight to you), or visit U.S. Legislative Tracker anytime.

Developed by International Foundation Information Center staff. This does not constitute legal advice. Please consult your plan professionals for legal advice.